Next to setting up the external hourly price for a certain user you can also define the internal cost of your employees. Discover here what this is, how to set it and when to use it.
What is it?
The internal cost represents how much costs (in salaries) are made for every hour tracked by the employee. Figuring out how much an employee costs on a monthly or yearly base isn’t all that hard. But how do you translate this into an hourly rate? You have to keep certain things in mind, such as bank holidays, leave, taxes & benefits…
There are a few calculations to help you determine this cost. But we suggest contacting your payroll provider for a detailed calculation.
Gross salary of the employee / available monthly hours
The full capacity of an employee is 173 hours in a schedule of 40 hours per week. That gives us for example: €3000 per month / 173 hours = € 17,35/hour
Holidays or overhead (taxes and benefits) not included
Gross salary * overhead factor / available monthly hours minus holidays
Say you have 20 paid holidays, then the amount of available hours per month is calculated as: (40 hours * 52 weeks) - (20 paid vacation days * 8 hours per day) / 12 months = 160 hours. That makes our calculation: € 3000 / 160 = € 18,75/hour
However you also have to keep your overhead into account. To get an exact calculation, it’s best to consult with your payroll management. For an estimation however, you can use an overhead factor: €3000 * 30% overhead / 160 hours = € 24,38/hour
Overhead covers bonuses, taxes, insurances, etc. People could include non-billable employees in this overhead as well
How do I set my internal cost in Teamleader?
First of all: only Teamleader admins with access to HR are able to set an internal cost per employee. To set an internal cost for a user, follow these steps:
Go to Settings > HR
Click on the pencil next to the name of the user for which you want to add an internal cost
Fill in the field ‘Internal cost’ by inserting an amount per hour
When to use it?
The internal hourly cost comes in handy when you are using the project module and you want to see how much profit you made on a project. The profit is the overview of the costs you’ve made in relation to the revenue of the project. This feature also tracks for example how much costs are spent by people tracking time on a project. To consult the profit on a project:
The user needs to have access to profit (Settings > HR > Profit on projects)
The internal cost for every participant of the project needs to be set in Settings > HR otherwise the following message will appear: